House tackles climate change, ag offsets

If they want to see climate change legislation pass Congress, it has become obvious that proponents must tackle gaps in corresponding scientific and policy forums.

Even after years of sounding the global warning alarm, of gathering data, of preparing predictive models and proposing solutions, it remains far too easy to poke holes in what should be, by now, a tighter case for global warming.

If a massive, hugely expensive climate-targeting bureaucracy is built, shouldn’t it be upon bedrock science?

Perhaps such unequivocal bedrock will eventually be found. But the lead up to the early-December climate forum in Denmark wasn’t smooth for those agitating for a global effort to tackle climate change.

And the task became much more difficult following the late-November release of e-mails — obtained by a hacker of a British university’s computer system — between prominent U.S. and British scientists studying climate change. The e-mails show willful, data-related obfuscation and back-biting (including calls to ignore researchers and journals who publish articles questioning the prevailing climate warming theories).

Against this backdrop would it surprise anyone if anything beyond small, cosmetic pledges came from the Copenhagen summit? Clearly the revelations in the e-mails are manna for those who see climate change believers as data-hoarding zealots willing to tilt science to their preferred ends.

To be fair, once they are fully parsed in context the e-mails may not be as important as they currently seem. But with questions swirling, it is hard to argue against a conservative tap on the brakes, a pause in the recent, all-out hurtle towards climate legislation.

Before going further, it seems time to put the raw data on the table — which the aforementioned proponents have largely resisted — and sort out the truth, find that bedrock.

House hearings

With all that occurring, on Dec. 3, the House Agriculture Subcommittee on Conservation, Credit, Energy, and Research heard testimony on the cost and benefits of agriculture offsets that would be provided under a proposed climate bill.

While doing their best to play up the positives of climate legislation, Obama administration representatives were unable to provide concrete answers to many questions. However, both sides agreed that under the proposed bill, tens of millions of acres of cropland and pasture would be converted to forest. What they were less sure of was the effect such a shift would have on the nation.

In earlier testimony the subcommittee heard from witnesses “about the impacts that regulation and legislation addressing greenhouse gas emissions will have on our farms,” said Pennsylvania Rep. Tim Holden, subcommittee chairman.

“At the same time, witnesses discussed the effects of a changing climate on our cropland and livestock. What was clear from their testimony is that both action and inaction come with a price tag.”

Holden acknowledged the disparity of climate views and cap-and-trade effectiveness and “the wide and growing debate about whether or not” offsets to counter costs related to climate legislation “are viable, verifiable and profitable.”

Virginia Rep. Bob Goodlatte, ranking member, was immediately much more pointed. HR2454, the American Clean Energy and Security Act — “or, as I call it, the ‘agriculture can’t exist’ standards — creates a cap-and-tax program that will drive up energy and input costs for our farmers and ranchers and drive down farm income, ultimately putting many producers out of business.”

“Proponents of cap and trade point to agriculture offsets and claim they create potential to add farm revenue to mitigate increases in production costs. But this provision also produces winners and losers. While every commodity will be hit with increased costs only select producers will be able to take advantage of revenue-raising offset projects.

“Meanwhile, entire regions of the country will be ignored and placed at an economic disadvantage because producers aren’t able to participate in offsets or projects that are economically feasible.”

Goodlatte said USDA Secretary Tom Vilsack often claims an offset program will be a major source of revenue for farmers. However, he’s yet “to produce evidence to back this claim except for the example of a producer who stops farming and converts cropland to trees. According to the EPA (Environmental Protection Agency) this conversion could be as high as 60 million acres — nearly twice as much land as is eligible under CRP (Conservation Reserve Program).

“Let me be clear, in many cases the decision to take farmland out of production won’t be made by farmers. Rather it will be made by landowners. Converting this farmland would be devastating to agriculture and rural America. Fewer acres would potentially mean more expensive feed for livestock producers and less revenue for agribusiness.

“Additionally, rural towns and communities will see a decrease in tax revenue that is necessary for essential community services.”

Offset positives

Joseph Glauber, USDA chief economist, made three main points about how agricultural offsets would work.

On the other hand, “limited offset availability could result in higher costs to the economy,” continued Glauber. “In its analysis of HR2454, the EPA estimates allowance prices would be almost 90 percent higher if international offset markets weren’t allowed. In a similar analysis, the Energy Information Administration estimates that allowance would be 64 percent higher with no international offset market.”

• Second, offsets are a potential income source for agriculture producers and forest landowners through changes in land management practices.

“While the profitability of management practices and carbon storage that is attainable varies widely by region, net revenues from agricultural offsets can help mitigate the effects of higher production costs due to higher energy costs.”

• Third, a domestic carbon offset program could affect land use, agricultural production and prices.

If planting more forestland proves to be the primary source of carbon offsets, “cropland and pastureland would be converted to forest, which would raise farm prices and increase farm income but also potentially result in higher food prices for both domestic and foreign consumers.”

Other possible sources of offsets such as conservation tillage, said Glauber, “could have smaller effect on land use and agriculture production and prices. We have found the … income effects due to higher production costs under HR2454 will be relatively small, particularly over the short run.

“However, I believe a far more significant factor will be the effects of carbon offsets. There’s no question that offsets will provide producers with the potential means to enhance farm income and more than compensate for higher production costs.”

The bigger issue “will be the source of the offsets,” said Glauber. “If too much cropland is diverted to aforestation, higher prices will result. This would put pressure on the livestock sector and, ultimately, food prices.”

Four points

Sitting alongside Glauber, Joseph Kile, the Congressional Budget Office’s (CBO) assistant director for microeconomic studies, said as a general rule, “the more stringent a cap on greenhouse might be, the greater the opportunity to reduce the cost by including offsets.

“In practice, reducing the concentration of such gases in the atmosphere would depend on whether the activities that produced the offsets result in actual reductions of greenhouse.”

Ensuring that, said Kile, means addressing four challenges with offsets:

• Offsets would need to bring about additional reductions in greenhouse gases.

“That is, they would need to result in reductions that would not have occurred in the absence of the program that grants credit for offsets.”

• Offsets would need to be quantifiable so that any reductions in greenhouse gases could be reliably measured.

• Offsets would need to be permanent rather than simply delay the release of greenhouse gases into the atmosphere.

• Offsets would need to be credited in a way that accounted for leakage in the form of higher emissions elsewhere in the economy.

Questions

Holden asked Glauber if he agrees with the CBO that only 10 percent of offsets would likely come from agriculture practices. “In your opinion what practices should be eligible for offsets?”

Under the modeling results provided by EPA, “of the 2 billion metric tons of offsets, about 400 million were provided by agriculture,” replied Glauber. “So that’s a slightly higher figure than the CBO estimate.

“I’d certainly agree with the amount of uncertainty in these estimates. … Early on, as carbon prices are lower, there’s very little coming in on the agriculture side — a little bit of pastureland is converted to forest. But as you move out and carbon prices get higher and higher, that’s when you see a lot of accumulation in the out years.”

An amendment in HR2454 gave USDA control over implementing an offset program for agriculture and forestry, said Holden. Has the USDA “thought about how to implement such a program? Do you think the USDA has the staff and resources to implement such a program? In your opinion could the USDA get a program up and running in one year?”

Doing so, admitted Glauber, would be “a daunting task to say the least. One of the big issues will be quantifying various practices. That’s a key part of these offsets — standards established, verifiable and there’s some certainty in what carbon is being sequestered or the amount of greenhouse gases are being reduced.

“USDA is doing a lot of work this year in getting a very large matrix that outlines various agricultural practices with the specific carbon reduction by region and practice … and develop standards.”

Later, Goodlatte asked what percentage of U.S. crop acreage is rented. “I’m concerned that if a large quantity of cropland is to be converted to trees that the decision will be made by landowners, not farmers. This would also mean farmers might not see the benefit of offset revenues.”

“You raise an interesting point,” replied Glauber. “I think there could be potential ways in establishing these programs where benefits could be shared.”

Goodlatte was also “very concerned” about what converting 60 million acres of land into tree production would do for both crop markets and forestry. “We have, right now, 191 million acres of national forestland that’s been nearly fenced off.

“The trend away from carbon-based fuels means the 60 million new acres of trees available on the market won’t be very attractive for energy production, something I think we should be looking at with our existing forestry base. This legislation will considerably diminish the value of that.

“There’s a whole lot more that we don’t know about what this legislation will do than what we do know. I appreciate both your efforts to project that, but the fact is the law of unintended consequences will hit us very, very hard with regard to this legislation, I fear.”

Minnesota Rep. Colin Peterson, chairman of the House Agriculture Committee, then pointed to another sore subject: the lack of a broad-based baseline. Both witnesses said the EPA baseline was the only one available to make projections from.

“I’m hearing from a lot of people,” said Peterson. “One of the things we’re trying to do is get at what this legislation would potentially do. … As I understand it, everyone” studying the consequences of climate legislation “is working off that EPA baseline. … I’m being told that this baseline isn’t right, or realistic. … Is anyone out there doing another baseline?”

Glauber said the “USDA does a 10-year baseline. We do projections and use that for forecasting and budgeting purposes. Anytime there’s a new bill before Congress we look at it in the context of a 10-year baseline. Most of the time, we don’t have to look out 30 or 40 years.”

Glauber’s next line will surely perk up the ears of climate change naysayers: “It’s a dangerous thing to do that just because of the great uncertainties. With something like climate change legislation where you have changes occurring 20, 30, 40 years out, obviously people have questions.

“We’re all struggling. We have modeling efforts going on right now to extend baselines.…”

Those models are currently being constructed by several universities, said Glauber, including Texas A&M, the University of Missouri and Iowa State.

Peterson asked when will the results will be available.

“We’re hoping for results later in the year,” said Glauber. “To have a full, well-structured forestry model will take, frankly, a little longer.

Peterson wanted a firmer date, but Glauber was unable to provide one.

“Somebody needs to get some alternative analysis because there are a lot of folks that really question the methodology of EPA, question if EPA understands what we’re doing in agriculture,” said Peterson. “We’d feel more comfortable with another baseline.”